DG Khan Cement has strong FY15

DG Khan Cement, part of the Nishat Group, has posted net earnings of PKR7.63bn (US$73.1m) in the year ending 30 June, up 28 per cent compared to full-year earnings of PKR5.97bn in the same period of last year.

The company runs a total of 4.2Mta of production capacity in three cement plants with two located in Dera Ghazi Khan and one in Khairpur district, Chakwal.

The key reasons behind the earnings performance included an improvement of 80 basis points YoY in gross margins to settle at 42.4 per cent during the 4QFY15, fuelled by falling coal prices.

Meanwhile, financial return was aided by a 18 per cent YoY decline in borrowing costs, due to lower interest rates and deleveraging of the balance sheet. Reduced administration and selling expenses (down 17 per cent YoY) also provided support.

Earnings per share (EPS) increased to PKR17.40 against an EPS of PKR13.62 in the period under review. The company has also announced a final dividend of PKR5.00 per share.

DG Khan Cement posted a profit of PKR2.25bn in the fourth quarter (April to June 2015), exhibiting a growth of 11 per cent against a net profit of PKR2.02bn in the same period of last year. EPS in the fourth quarter jumped to PKR5.14 from an EPS of PKR4.61.